Stocks hit a moderate gain Wednesday after another trading day on Wall Street, leaving the market close to recent highs.
The Standard & Poor’s 500 index rose 0.2% after moving between small gains and early losses. Gains in several Big Tech companies, including Intel, Apple and Amazon, helped push the S&P 500 higher, even as most stocks in the index fell . These gains outweighed losses in the industrial, manufacturing and other sectors.
Treasury yields stalled after a sharp rise since the beginning of the year. A 10-year benchmark yield fell amid concerns that the Federal Reserve could block the purchase of Treasury securities. Expectations of higher government spending and the potential of inflation have helped drive higher bond yields.
The S&P 500 rose 8.65 points to 3,809.84. The Dow Jones industrial average fell 8.22 points, or less than 0.1%, to 31,060.47. The tech-heavy Nasdaq rally added 56.52 points, or 0.4%, to 13,128.95.
Markets around the world have recently torn higher in hopes of a healthier economy on the way due to the spread of coronavirus vaccines and the expectation of more stimulus from the U.S. government. soon to run with the Democrats.
Some of the biggest actions have been in the bond market, where expectations for increased federal borrowing, economic growth and inflation have pushed Financial output further to the highest levels since last spring.
The 10-year Treasury yield slowed its climb, however, and slipped to 1.10% from 1.12% late Tuesday. Analysts said statements from two Federal Reserve officials a day earlier helped raise concerns that it could prevent the purchase of Treasury securities. These purchases have helped keep rates low in hopes of boosting financial markets and the economy.
The concerns are a reminder of the 2013 “taper tantrum” when markets collapsed after the Fed said it planned to delay bond purchases as the economy recovered.
Low rates have been one of the main foundations for the rise of the records market, even though much of the economy is still struggling under the worsening pandemic. The 10-year yield has been pouring higher, up from 0.90% on Jan. 4, the day before two Georgia overrun elections took control of the Senate – and therefore Washington – for Democrats .
The Fed has been free to keep short-term levels at near zero to some extent as inflation has remained weak. Wednesday’s report showed consumer prices were up 1.4% higher in December from a year earlier. That was slightly more than economists expected, although it is still relatively low.
The Fed released its latest “Beige Book” on Wednesday. The study of U.S. business conditions found that most of the 12 Fed regions reported small gains in economic activity a few weeks ago. But two districts saw a decline in activity and two others said there was little or no change.
If interest rates continue to climb, it could support the argument for critics of the stock market, who say it has climbed too high and left prices too expensive.
Stocks that would benefit particularly from low levels helped move the market higher on Wednesday. Utility stocks typically pay relatively large shares, so their demand often rises when bonds pay less interest and attract less. of investors seeking income. Resources rose 1.9% for maximum gain among the 11 sectors that make up the S&P 500.
Tech stocks have also climbed, as low interest rates help make investors more willing to pay high prices for the growth they anticipate. Inside the group, Intel jumped 7% after announcing that veteran veteran Pat Gelsinger will take over as chief executive next month. They also said it expects revenue and profit to report for the latest quarter above expectations.
Eventually lost some of the biggest winners in the market recently, which has climbed in anticipation of a stronger economy and higher rates. Raw material producers in the S&P 500 fell 1.1%, while industrial stocks lost 0.6% and financial stocks lost 0.9%.
Stocks of small firms withdrew from their recent big rally. Russell’s 2000 index of small cap stocks slipped 15.99 points, or 0.8%, to 2,111.97. It is still 6.9% higher for 2021. These towers will be above the 1.4% increase for the major stocks in the S&P 500.
Other risks also depend on the market, with the pandemic getting worse. The acceleration of COVID-19 accounts and hospitals is doing more damage to the economy, with U.S. employers cutting more jobs last month than they added for the first time since spring.
Political uncertainty still plagues Washington. A majority of lawmakers in the House of Representatives voted Wednesday to implore President Trump for inciting a revolt. Democrats and even some Republicans decided that Trump sparked a revolt after inciting a group of loyalists who went on to storm the U.S. Capitol last week. Voting ended after the end of regular trading.
Investors have largely overlooked such political turmoil, however, focusing instead on prospects for a stronger economy ahead.
President Joe Biden is expected to release details of his plan to boost the economy on Thursday. They could include larger cash payments to most Americans.